Pahalgam fallout: How New Delhi's import ban is likely to affect Pakistani goods worth $500 million entering India via intermediary countries

Trade between India and Pakistan worsened after the Pulwama terror attack in 2019.

In another round of punitive measures, following the inhuman attack in South Kashmir's Pahalgam that claimed at least 26 lives and injured many more, India has imposed an immediate ban on the import or transit of all goods originating in, or exported from, Pakistan. The Commerce Ministry's notification is directed to plug loopholes and eliminate any possibility of Pakistani goods from entering Indian territory.

The Commerce Ministry's order is to further build upon an earlier directive for immediate closure of Wagah-Attari border following the Pahalgam attack. However, trade experts believed that trade with Pakistan remained possible after the Attari border closure through transhipment hubs such as the UAE, Singapore and Colombo.

Commerce Ministry's latest readout

“Direct or indirect import or transit of all goods originating in or exported from Pakistan, whether or not freely importable or otherwise permitted, shall be prohibited with immediate effect, until further orders. This restriction is imposed in the interest of national security and public policy. Any exception to this prohibition shall require prior approval of the Government of India,” the Directorate General of Foreign Trade (DGFT), under the Commerce Ministry, said.

Pakistani goods entering India through intermediary countries

Trade items including dry fruits and chemicals worth $500 million are reportedly entering India via intermediary nations such as UAE, Singapore, Indonesia and Sri Lanka, according to an official, quoted by PTI. The officIal also highlighted that a considerable portion of the Pakistani exports previously sent directly to India are now being channelled through alternative routes.

Countries that serve as repackaging points for Pakistani goods

The UAE, reportedly serves as a repackaging and relabelling point for Pakistani fruits, dry dates, leather, and textiles before their dispatch to India, whilst chemicals are reportedly sent via Singapore. Similarly, Indonesia is being used as a transit route for Pakistani cement, soda ash, and textile raw materials. From Sri Lanka, it is expected that Pakistani dried fruits, salt, and leather goods were being shipped to India.

The rationale behind Commerce Ministry's latest missive

Since there is a possibility of some of the USD 500 million exports now being routed to India through other countries, it is necessary to put a complete ban on exports from Pakistan to India (direct or indirect) and monitoring and identifying goods which may be coming by on country-of-origin manipulation, PTI reported quoting the official."This comprehensive ban imposed by India including a ban on indirect exports would enable the customs authorities to prevent Pakistan exports from entering India through circumvention," the official added.

How trade between New Delhi and Pak worsened since Pulwama terror attack

Trade between India and Pakistan worsened after the Pulwama terror attack in 2019. India then raised import duties to 200% on all goods from Pakistan, including fresh fruit, cement, petroleum products and mineral ore. India had also cancelled Pakistan’s 'most favoured nation' trade status. Trade between India and Pakistan has fallen sharply in recent years. Between April 2024 and January 2025, India imported just $420,000 worth of goods from Pakistan — a steep drop from $2.86 million during the same period the year before, according to Commerce Ministry.